Traders Pay to Get an Early Peek at Data

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... the the ... on the morning of March fifteen stocks stumbled on news that a key reading of consumer confidence was unexpectedly low ... one group of investors paid to get the University of Michigan's consumer report two seconds before an in house ... and in the age of high-speed trading ... that's plenty of time to make a tidy profit Michael Rothfeld joins me ... with today's page one story in the Journal Michael good morning ... I love that book that I ... could talk about the receivers did you plants ... University of Michigan ... the captain's I know it's ... so blue is when things are talking about Governor reports are protected ... by the jobs report protected those things come out simultaneously ... why the reports ... Institute for Supply Management ... uber see Michigan consumer confidence index ... these kinds of things while tells about how those are distributed ... well these are the numbers of center produced by private groups so there's a lot of talk about insider trading when it ... relates to company information or government information about private groups to produce their own numbers ... there is ... they're allowed to basically distributed how they please and tax charge people for of for ... premium access a lot of these groups ... will sell the rights to distribute their data to media companies come and do it on their own in the skeleton two years ... so that people who wanna faster will pay more and in some cases getting very very quickly stake and trade or anybody else what to say I mean this is ... it in the parlance material nonpublic information ... which is the kind you can train on ... otherwise it's insider trading but in this case ... if ... if if you're selling it ... you know if he if you're ... given ... really for us the permission ... by the source to use it when there's no prob right it's it's their proprietary information so they're a tele can use it ... you know it doesn't fit in what analysts only their and their priestly school early ... well because the firm well that's really a legal so Reg FD with to prevent that that's ... a lot that was passed to prevent such investors from getting ideas that are getting a white wire Reg FD prevents ... prevent that stock is trading on initial stock will that was the reason that the average investor from ... having regulated companies ... provide their own information ... these are regulated securities so the difference here is that these groups are ... essentially putting together this debt on their around to doing your research they say this is our war ... it's our work cut out so essentially you know it's were allowed to do whatever I want with it and there's nothing in the law some people say there's a whole lot that allows because this is market moving information were talkin about ... as you mention the University of Michigan's consumer survey which is widely watched in its markets ... AAA ... you have ... the manufacturing reports that produced by the Institute for Supply Management report says the Chicago business barometer which is a ... widely watched ... a gauge of business activity in the Midwest and ... these things move all sorts of our kids how to high-speed traders ... two seconds of me time how was that enough to make a lot of money ... because they have very high speed lines that ... and they set up with the group's edited by reading email would be very hard for me to process what I've just seen an organ ok what trade money to put on a do it right ... but we're not talking bout the others offer when it does offer rent in advance so Thomson Reuters ... one of the doves competitors is ... one of the groups that distributes to stay that Deutsche porcine German extends another ... and they will feed the information through Barry mould and what they call only the sea lions which essentially means that goes by computer electronically immediately ... and then the traders on the other end will pre program what traits they want so they've always look at what markets are in a move ... based on this information when it comes out depending on what the results are soo and it is now ... about machine learning earlier on the onthe program machines no gas in the Premier's access but treats put on as soon as they can look for smarter than we are puts with ... the tub of what's the use of the party study of like ok if the number goes down and slower than expected what's gonna happen or what's likely to happen and said they the trades just basically happen ... and I don't even need two seconds in in the Michigan ... survey that you mention Mark fifteen seven billion ... trades the shares were shorted within one second per second well how and how much last question how much money ... is being made on ... on these these various purports that are going utterly and people trading on the stairway to now well there's estimates which we said and I think seventy five million dollars in this type of the thing across the market in the year so ... I'm you know it as a fraction of what Wall Street makes it's it's not it's not that much but it still is pretty is pretty good money okay forget it Michael Rothfeld for more on Michael storyline that Brody Mullins and smother smart people ... be sure to check out a one in the Wall Street Journal today Michael thank so much ...